Cash Is King

But the queen provides the security and integrity needed for payment processing

IIf cash, in its varied forms, is king, then compliance is queen of  the gambling world.

Together, they occupy a figurative gaming throne. The “king” supplies the assets fueling this frenzied, multibillion-dollar industry and the “queen” maintains its safety. Together, they are increasingly inseparable, and increasingly important.

Compliance has exceeded the realm of industry jargon. It’s a necessity as billions of dollars flood casino floors via ATMs, kiosks, cash advance, debit and credit-card mechanisms. Ticket-in, ticket out, automated games and more sophisticated kiosks drive the industry’s push for speed. Casinos enjoy  increased time on device, reduced time between game outcomes and a microscopic look at their customers.

But there’s a flip side. The industry’s advanced capabilities tempt money launderers, and casinos must help the government find them.

Vendors understand this need. They unfurl more solutions that are effective, if not grandiose, to casino operators. Manufacturers tailor products aligned with Title 31, also known as the Bank Secrecy Act, which requires casinos to work with the federal Financial Crimes Enforcement Network (FinCEN) to thwart money laundering throughout their properties.

It’s not an easy task, but gaming operators discovered how serious the government can be about it last year. Las Vegas Sands was fined $47 million for accepting funds on behalf of Zhenli Ye Gon, a native of China who was being held pending extradition to Mexico on drug-trafficking charges.

Money was wired from several banks and currency exchange houses in Mexico to LVS accounts in the U.S., according to published reports. Ye Gon was a high roller who had lost more than $125 million in the casinos, which were viewed as an acquiescent partner in this instance. But imagine if the laundering process was launched by a terrorist group, analysts maintained. What if casinos were blindsided by sophisticated criminals?

The fine, large by casino standards, reverberated through the industry. Reporting transactions exceeding $10,000 was no longer enough. FinCEN wants information on the source of funds, customer due diligence, international money transfers, pass-through activity and data on dormant accounts. It’s the same information required of banking institutions in the global terror war.

Attempted manually, this is labor-intensive, if not impossible.

Operators instead turn to manufacturers, who produce a product line aimed at increasing the property’s compliance effectiveness. The innovations also make casinos look proactive in government relations and allow them to save manpower for normal operations.

But compliance—a form of financial housecleaning—isn’t sexy. That’s why manufacturers stress the dual use of their new products in helping to identify key players. The same technology used to meet government regulations can service high-end customers.

Vendors thus have two methods to sell their latest wares.


Software Play

Global Cash Access has long satisfied customer demand to “show me the money.”

The Las Vegas-based company already owns a dominant market share of the North American land-based cash-access market, being licensed in over 150 gaming jurisdictions. GCA generates more than $20 billion in cash distributed to gaming patrons and processes over 90 million transactions each year through its land-based operations. Company highlights include a rich database of more than 8 million patrons accessible through Central Credit.

GCA’s latest move is, literally, NEWave. It acquired the leading compliance software supplier to the gaming industry this past spring, addressing a significant customer need in an increasingly complex regulatory environment.

In the time-honored tradition of industry powerhouses, GCA purchased a company and thus a strong market position. Obtaining NEWave enabled GCA to provide a major client service, according to Tim Richards, the company’s general manager and senior vice president of interactive solutions.

“It is working out very well to this point,” Richards says. “There is a lot more focus on that portion of the business right now. There is a push on greater oversight of customer money from the casino perspective. The focus on anti-money laundering and knowing where the funds are coming from for high-end players has become increasingly important.

“The fines we have seen levied for these reasons indicate that this is going to be a growth area in which we can help better manage the integration of cash-handling products.”

NEWave’s Title 31 Manager is the leading software of its kind. It automatically completes, files and archives forms required to comply with federal Title 31 money laundering requirements, Richards says. In addition to other features, Title 31 Manager provides consolidation of all audits as well as creation of the CTR, SAR, W-9 and W-8 and electronic filing.

NEWave’s myDocument Manager suite automates document flow, manages routing and approval of forms, digitally stores specialized gaming documentation scanned from NEWave’s other suites, and provides an end-to-end document solution for departments across the entire operation. The solution can be implemented at stand-alone properties or across multiple locations.

Other notable developments involving NEWave this year include gaining a multi-property software agreement in Oklahoma and the installation of several modules of myDocument Manager at the Downtown Grand in Las Vegas. NEWave fit immediately with GCA products, according to Richards.

“We have integrated NEWave into our Jackpot Exchange, and we expect to do more in the areas of kiosks and Table Xchange,” Richards indicates. “We can streamline the anti-money laundering reporting going forward and we can ease the transition for casinos that are now being asked to do what the banks are required to do.”

NEWave joins an established product lineup for GCA.

The company  achieved a significant development in August, announcing it had been awarded a comprehensive, five-year contract with one of its top customers, Station Casinos. The deal means GCA will begin to provide its full suite of cash-to-floor and compliance solutions across all Station properties, including Green Valley Ranch Resort, Red Rock Resort and Wildfire properties.

GCA’s integrated kiosk platform can be combined seamlessly with its  anti-money laundering and other compliance solutions through Cash Club, the company’s upgraded cage application. This will help customers meet compliance obligations.

The Station development occurred after Ram Chary, the chief executive officer and president of GCA, indicated in late spring that the company wants to become a long-term strategic partner with its clients, especially via the integrated kiosk.

Rather than focus on short-term hardware sales, GCA will offer kiosks as part of an overall cash support solution. With innovations like QuikTicket, TableXchange and Cash Club entering the market, GCA wants to integrate them into broader, multi-year solutions.

Hardware-Software Tandem

Las Vegas-based DiTronics handles nearly $3 billion annually, or about $7 million a day. It has long specialized in in check-cashing, ATMs, kiosks and other cash-access poducts, servicing 450 casino operators.

DiTronics helps casinos in the compliance area by offering a comprehensive library of more than 70 reports, encompassing market offerings as well as financial audit and balancing reports across all applications. Access is provided securely and is available from any internet-enabled device.

So much for the nuts and bolts.

DiTronics has also fired a one-two punch into the funds access market. The hardware-software combination will be featured together.

The hardware is its 200 DFS 5 “N” 1 ticket redemption solution, which exceeds the prevailing ATM performance average, according to Jim Kirner, senior vice president of sales and marketing in North America for DiTronics.

“Ours is built on the Glory hardware platform out of Japan,” Kirner explains. “They have a huge presence in the banking and gaming industries, and they build their equipment to be industrial-strength for cash management. An ATM is built on average to do 450 to 600 transactions a day. Ours is rated to do 1,000-plus.

“That’s really important in an age in which operators are busy doing 8 million things. Everybody is watching the bottom line; they are busy being super-ultra competitive, and they tend to view people getting their money as a basic thing. We continually want ATMs and kiosks to do more.”

The DFS-200 is about a year old. It increases cash on the floor by turning ticket redemption terminals into user-friendly ATMs, cash-advance and check-cashing kiosks. Kirner says it has an innovative design, high-quality LCD displays, multiple languages, high-speed communications and the ability to support multiple cassettes. It is backed by a 24-7 staff call center.

The software? If DFS 200 is the car, Transaction Rewards software is an essential option, like a premier sound system. This product brings marketing technology into play.

“The funny thing about the accessing of monies with kiosk devices and ATMs is that you have no idea as an operator who is using that,” Kirner says. “That means perhaps 50 percent of the money coming onto your gaming floor is coming from people, and you have no idea who it is. Transaction Rewards will help you as an operator understand who that player is.

“If Donny Big Bucks comes into your property and swipes his loyalty card, we can help you market to him. Player ranking is built into the algorithm, so if he is a higher-limit player, you can allow more funds availability. We help your best players get better limits than they will with your competition.

“You can also decide to reward Donny by waiving his surcharge to use the machine, providing points based on the amount of his play, and—we’re talking about this right now—give him a certain amount of free play. Operators have comped these types of things in the past, but it has always been manually.”

The DiTronics interface to the casino player database provides configurable, variable cash-access pricing and enhanced check-cashing features. Transaction Rewards offers greater insight into player cash-access usage and patterns, which also provides value-added data for marketing, Kirner asserts.

Features include play-driven check-cashing limits, automatic segmented fee discounts, fee payment via club points or comps, and consolidated player tracking and cash-access reporting.

Benefits include increased cash to the floor, recognition of high-value players and increased insight into customer spending habits, according to Kirner.

Transaction Rewards can be added to existing DFS hardware. Another component already built into the kiosk is Smart Dispense, which allows operators to tailor payouts into the bills it believes customers want. It can set up a kiosk to deliver higher bills in a high-limit room, for instance. Smart Dispense will provide more $100 bills. Smaller bills might be dispensed in lower-denomination rooms.

Team of Rivals

Cincinnati-based Vantiv already is a beacon of transparency. It handles 16 billion transactions and more than $600 billion in card volume annually. It services retail giants Wal-Mart and CVS, among others.

Vantiv applies the same standards to gaming, which it entered last year. Its analysts stay abreast of emerging state and federal legislative activity related to the casino world.  While Vantiv’s gaming push concerns the future of online gaming, its reputation for efficient reporting brings a twofold purpose to its sales pitch. It can help casinos know their customers and trace the money.

At last year’s Global Gaming Expo, Vantiv plunged into the casino realm by launching Vantiv Gaming Solutions. Gaming, with projected double-digit annual revenue over the next several years via fantasy sports, online wagering, social gaming and the lottery, provided a logical extension for Vantiv’s enterprise. Its scalable, customizable solutions run on a single proprietary platform and are built to include iGaming, mobile gaming, cashless gaming, prepaid and alternative payments acceptance.

If  someone wants to use a card to fund his gaming purchases, Vantiv will provide the connectivity to allow that transaction to occur. That dynamic can occur both online and inside the casino. Regardless of how slowly online gaming proceeds—several more states are expected to adopt it, although it has not matched industry revenue forecasts—more people use cards than ever before. Money is spent in restaurants, spas, shops and hotel bars.

That’s good news for anyone servicing the amenities that complement gambling.

“Its been a very strong first year for us,” says TJ Sharkey, the vice president of operations and business development for Vantiv Gaming Solutions. “Gaming has proven to be successful for us. We have seen no different experience with gaming than in other businesses. We do have the history and tradition of being able to support what the merchants are looking for.

“There have been no underage issues, no money-laundering concerns, etc. We work well with regulators. We understand the gaming market just as we do our other markets. We go into a casino, and whether this involves ticketing, hotels, sports functions, etc., there is nothing on the floor we cannot handle.

“In any casino setup, there are all kinds of point-of-sale transactions. It can be the spa, the golf course, the lodging, the food and beverage, a ticketing function—all require payment capabilities. We are the payment processing service for all of those functions.”

A significant part of Vantiv’s strategy involved becoming an equity partner in Sightline. This four-year-old company involves its growing relationship list with casinos to utilize a general-purpose reloadable card. Borgata and Golden Nugget became partners with Sightline early in New Jersey’s online gaming era. Sightline enables a property to send a prepaid card with its logo, etc., to customers who have funded the purchase online.

Diran Kludjian, executive vice president of Sightline Payments, says the Vantiv-Sightline partnership excels in several areas. Among them: Kludjian says casinos also obtain money that settles back into their accounts, like ATM surcharge fees, much faster with Vantiv and Sightline. They obtain the funds after each day, rather than monthly, which is customary in the business.

“For big casinos like Mohegan Sun, etc., that moves the needle for them,” he indicates.

Sightline also figures to enhance its casino relationship by sharing the interchange money, the fee card issuers make on transactions, with casinos.

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Casino Connection Sports Editor Dave Bontempo is an award-winning sports writer and broadcaster who calls boxing matches all over the world. He has covered the Philadelphia Flyers in the playoffs, as well as numerous PGA, LPGA and Seniors Golf Tour events, and co-hosted the Casino Connection television program with Publisher Roger Gros.